Answer to Question #183822 in Financial Math for aqsa nabi

Question

uneven cash flow stream:

What are the PVs of the streams at 0% compounded annually?

0-------------1----------------2---------------3----------------4-------------5

stream a $0 $100 $400 $400 $400 $300

stream b $0 $300 $400 $400 $400 $100

Answer 1

$Stream A$

$Present { }value = (100/1.00^1)+(400/1.00^2)+$

$(400/1.00^3)+(400{/}1.00^4)+(300/1.00^5)$

$100+400+400+400+300 = 1600Dollars$$Presentvalue B=(300/1.00^1 )+(400/1.00^2)+$

$(400/1.00^3)+(400/1.00^4)+(100/1.00^5)=$

$300+400+400+400+100= 1600 Dollars$